Toyota is betting big on the hydrogen for the long term. Its first fuel cell vehicles (like the Toyota FCHV pictured here at the 2008 New York Auto Show) may debut in 2015. Meanwhile it is scorning electric plug-in offerings.

Toyota plans on continuing to use less efficient nickel-metal batteries in its future Prius vehicles. It believes lithium-based batteries are too expensive for the efficiency gains they offer.

From battery chemistry, to electric vehicle adoption, Toyota isn't going with the flow

If you used industry-wide levels of
interest in lithium-ion battery technology and electric vehicles as a
barometer, both of these fields are at record highs. In the
U.S., the former "Big Three" -- GM, Chrysler, and Ford --
all have electric vehicles planned for release, with the GM's 2011
Chevy Volt being perhaps the biggest attraction. In
Germany, Daimler and child company Mercedes-Benz have both concepts
and planned market EVs. And in Japan, Nissan is gearing up to
debut the electric-only 2011
Leaf EV. All of these companies' electric efforts are
driven by lithium-ion batteries, and these batteries are going in
their hybrids as well.

The world's most successful vendor of
electric vehicle technology, albeit in the form of mild hybrids,
Toyota is going against the current on both of these trends, though.
In a new
Bloomberg report aired concurrent with the Frankfurt Auto Show,
it is revealed that Toyota extensively tested lithium-ion batteries
as a potential replacement for the nickel-metal hydride batteries in
its Prius and other mild hybrids.

What it found was that while
the batteries were extremely efficient and didn't raise serious
reliability or safety concerns, they were overly expensive for the
gains they provided. For that reason, Toyota reportedly
concluded that the market wasn't ready for lithium and has decided to
primarily continue with its nickel-based batteries for most of its
hybrid cars.

Toyota also concluded that electric vehicles were
too expensive to succeed in the current market. Toyota
Executive Vice President Takeshi Uchiyamada stated at a Frankfurt
Auto Show press conference, "Electric vehicles of today are less
costly than in 1990s, but if you compare them with the other vehicles
out there they are still too expensive. Unless there is a very
big breakthrough in battery costs I don't think electric vehicles can
take a large market share."

Toyota indicated that it will
likely stay out of the electric vehicle market for close to a decade,
the time it believes it will take for EVs to become profitable and
affordable enough for the masses.

So is Toyota right?
It's hard to say. Toyota's demonstration of business acumen
over the last several years is hard to argue, given its ability to
produce the first profitable
mass-production hybrid, the Prius, which leads worldwide hybrid
sales to date. Furthermore, there are a handful of competitors,
such as Germany's Audi, whose management are split
on the viability of electric vehicles (Audi's North American
president recently called buyers
of the Chevy Volt EV "idiots").

On the
other hand, the vast majority of the industry is shifting towards all
electrics, and if Toyota counts on its competitors to lower
production costs, it may find itself in a foreign hole when it
finally decides to enter the market. While some of the German
automakers are pushing for clean diesel as a supplement or
alternative to hybrids, Toyota is pushing
hydrogen as a long term solution, a technology that faces
significant production, transport, and storage obstacles -- all of
which raise the price. Toyota may release a fuel cell
(hydrogen) car by 2015, according to recent reports.

So for now Toyota is opting for one of
the least expensive and most proven solutions (mild hybrids), while
its mid-to-long term efforts focus on what is currently the most
expensive and least proven solution of them all -- hydrogen.

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You can use an engine that runs on vegetable oils. Diesel engines! Diesel engines can be (easily) modified to run on vegetable oil. Bio-diesel can be made out of soy, switchgrass, animal fat, cannabis, algae, and pretty much any other bio-mass. These bio-fuels can be used to run existing diesel engines without modification. Fact is, Rudolph Diesel made his engine to run on vegetable oil and ran his own diesel engine on peanut oil!

The answer to alternative fuel is (and has been) under our nose but bio-diesel and diesel engines are unpopular as well as there being no financial incentives, political motivation, or intestinal fortitude to make it happen.

When Ford advertises a diesel Fiesta that gets 60+mpg and then claims that there is no market for them in America and can only sell them in Eurpoe; what does that tell you? When VW shows a prototype diesel-electric hybrid that gets over 90mpg and there is no market for them in America; what does that tell you? When every non-American auto maker jumps on the hybrid bandwagon years before any American car company; what does that tell you. When our tax dollars are wasted to keep car companies alive; what does that tell you?

With the existing infrastructure and the proper incentives, America could lead the world in bio-diesel technology.

Electric vehicles will prove to be a costly alternative as well as a long term failure. The only way electric vehicles will be successful is if they are mandated by the government and kept alive by our tax dollars.

Scale is a huge issue "growing" fuel. The caloric output of all the food on the planet is only one sixth (~18%) of the world's daily consumption of oil, the vast majority of which is used in transportation. You'd still need to find a source of fuel to replace the remaining 82% of oil, even if you starved everyone.